If a major corporation follows a well-known bad management practice, should we conclude that they are behaving deliberately?

A friend has been working for a major corporation for twenty years. Recently the company was taken over. The old company had probably the most efficient and effective customer service operations in the industry. People developed personal relationships with clients and were able to provide good service based on their knowledge of their clients and their ability to quickly retrieve information. Employees felt a lot of job satisfaction from providing good service to clients.

The acquiring company threw out the automated information system, and replaced it with a manual system that involved reading scanned documents that were not well documented. In addition, they created pools of customer service reps who, instead of being responsible for two hundred clients they could get to know, were now collectively responsible for fifteen hundred clients that they could not possibly know.

As a result, customer service now take a lot longer because each rep has to research the client from the ground up, and it takes much longer to find the records they need. In addition, they never know what happens to the client because the next time the client contacts the company, it is likely that someone else will handle the issue.

My friend says there are numerous sources of dissatisfaction in the new job. Since you never know whether you’ve helped someone or not, there is almost no job satisfaction. It seems like the company’s priority is to just pump customer service requests out the door, by making sure someone is always available.

The lack of good records means that highly paid employees are doing work such as copying and filing. The company also has a lot of rules that they adhere to very closely, no matter what the situation, leading employees to feel mistrusted and ill used. The company sacrifices quality and employee satisfaction and employee control over their work. Employees have become cogs in a machine. If someone quits, there is no upheaval because the rest of the team takes over.

Finally, the company has been piling on more and more work, so that if you want to do a good job, you have to work about 12 hours a day. The only way to do that work in 8 hours is to cut a lot of corners.

It has been well known for over a quarter of a century that one important way to motivate workers and help them feel good about their work is to give them control over what they do and how they do it. Lack of control was one reason why assembly line jobs were so bad and why some auto companies learned to transfer more power to the workers by allowing them to do many different jobs on the line. Every employee on those lines had the power to pull the cord to stop the line if a car was defective.

Do you think my friend’s company is deliberately ignoring best practices and taking away the power of employees and turning things into an assembly line situation? If so, why? If not, how could a major company not know best practices that have been documented for many years?

If you worked for such a company, would you have any loyalty to it? Would you still want to do the best job you could? What would you do, knowing that your income was the only source of income for the family?

10 Answers

What they are trying to do is reduce employee expense at the cost of poor customer service. By pooling the customer agents and not assigning them to particular clients they have effectively made customer service a commodity.
My crystal ball says they are hoping to have higher paid, experienced workers leave and replace them with lower paid workers. The executive who decided to implement this strategy will receive a substantial bonus due to the reduction in cost.
The stock price will jump at first but this is the beginning of the end. Plan your stock sales and put option purchases accordingly.

This “new” company IMO is now all about profits and I bet will be making lots of it at the expense of the employees extra hard and grueling work. I would be surprised though if these new rates of profits will be sustainable as the good employees will seek out other jobs and many customers will bail because of the inferior customers service they now have to endure.

@worriedguy You’re right about the first point. My friend hates the job and is about to start looking. My friend is trying to decide whether to look for another job in the company, or quit and use the free time do a serious job search.

Your point about the stock behavior is quite interesting. This is like having inside information, in a way. My friend had to sign something about that. Your point is echoed by @Cruiser, as well. I wonder how long the process of increasing profits and then dropping profits will take.

@wundayatta
Time to stop “just looking” and get out before the place collapses. They are possibly going down the road of making profits by selling non-producing assets too.
Customer service does not make a “profit”. They maybe getting ready to “off shore” with the customer contact.

I would start looking while holding onto the job I have. It’s easier to get hired while you’re still working, and right now there’s no telling how long a search could take. Market wisdom I’ve heard says if you’re out of work, plan on looking for 18 months.

@wundayatta You asked about the timing. First you have to find out the timing of the Big dogs’ bonuses and options. Many are priced on 3/31. Until that date they will do everything possible to bump up the stock price so they can cash out. If you are a gambler you can buy out-of-the-money put options before that date with a delivery date 60 – 90 days later.
Unless they started the company, the top dogs never work for the benefit of the company. They work for themselves. It is up to the Board of Directors to come up with a strategy that aligns the greed of the execs with needs of the company. Unfortunately, the BODs are all buddies with each other and sit on each other’s boards so the oversight is meaningless.
The relationships are quite incestuous. It is why guys like J T Battenberg III or Alan Dawes are not in prison.
Vote with your pocketbook. If you see a company has poor management, bet against them – after the bonuses are delivered to the slime dogs yachts. You’ll be glad you did.